5.   MINING

5.3.1  

Grootegeluk Mine

Grootegeluk Mine is a large open pit truck and shovel mine in operation since l980 and was established to supply coking coal to Mittal Steel’s steel plants, and under a forty-year contract to supply thermal coal to Matimba. In agreement with Eskom, additional coal beneficiation plants have been built to produce metallurgical and thermal coal products for them and other users.

The maximum pit depth is 120m and is being mined on a total of 13 benches. The coal measures are flat lying, with a shallow dip of approx 4º towards the southeast. The Coal Reserves are fully mined, enabling backfilling of mining waste.

The LoM Plan has been scheduled and evaluated for 40 years and includes the Char project, GG6 Phase I and DMS fines. In the longer term, an in-pit crusher may be established to reduce the haulage times for the RoM coal products and this option is being evaluated.

The regional topography is relatively flat and two main haul roads located on the north and the south face of the present pit provide access into the pit. Access to each bench is from these roads and additional in-pit temporary ramps are constructed as required. The in-pit haul roads are constructed to a minimum width of 40m and a maximum gradient of 8%. Permanent haul roads out of the pit and onto the waste dumps are equipped with electric trolley assist for truck haulage, which increases the up-hill truck speeds and productivity.

The planned RoM coal production is approximately 39Mtpa to the plant to produce 14Mtpa of power station feed for Eskom, 1.9Mtpa of coking coal and 1.4Mtpa of metallurgical coal products. The waste stripping that is required to maintain this coal production is approximately 20Mtpa, which results in a waste to coal mining ratio of approximately 0.5 : 1. The required waste mining is expected to remain constant over the LoM.

Mining bench heights are determined by the respective geological contacts, and remain almost constant across the deposit. The mining bench heights range from 20m to l.5m depending on the Seam thickness. Considerable attention is placed on ensuring that each Seam is mined to its correct geological contact, minimising both dilution across Seams and coal losses to waste. The waste benches comprise Bench 1 (being the surface and weathered materials varying up to 20m thick), Bench 7A (a 4m thick shale), Bench 8 ( a 4m thick shale) and Bench 10 (a 4.5m thick sandstone). Bench Nos. 2, 3, 4, 5, 6, 7B, 9 and 11 comprise the coal Seams that are mined as units varying in thickness between 17m and l.5m.

The mining operation is conducted using a large fleet of conventional open pit mining equipment comprising blast hole drilling rigs, electric 25m³ hydraulic shovel and 20m³ rope shovels into 10 x 180t and 14 x 200t trucks, supported by appropriate ancillary mining equipment. The surface weathered materials on Bench 1 are free dug but the majority of the coal and waste rock to be mined requires drilling and blasting.

The mining equipment fleet is maintained on an ongoing basis, with interim major overhauls/rebuilds planned during the life of each of the primary units of mining equipment. Provision is made to replace the equipment as justified by higher maintenance costs/lower productivity as each unit ages.

The Grootegeluk pit shows no sign of slope or stack scale instability. Although some benches have been affected by fault induced failures these are considered normal for open pits and should not prevent the mine from achieving its planned production profile. The pit has been designed according to best practice in terms of geotechnical procedures.

Grootegeluk Mine has projects underway to further optimise the LoM pit and mining plan. These include:

• Optimising the development of the available reserves to match Kumba’s business plan and product sales;
  
• Determining the methodology for safe long-term disposal of mine and plant waste as backfill; and
  
• Optimising the timing and location for establishing an in-pit crusher for RoM coal.

5.3.2

Leeuwpan Mine

Leeuwpan Mine, a mature open pit coal mine in operation since 1992, employs strip-mining methods to access two conformable coal Seams. The mine is currently producing from two pits and the LoM Plan depletes Coal Reserves over a period of 30 years, thus classifying the Leeuwpan Mine as a long-life operation. The current LoM Plan includes 145.8Mt of RoM Coal Reserves to be extracted from the Kenbar, Witklip, Moabsvelden and Weltevreden areas.

The OWM block (84.7Mt) falls outside the mine boundary and mainly outside the Mining authorisation boundary. The LoM reserve schedule indicates that Leeuwpan mine plans on mining this block from 2007 to 2031. About 50% of the UI block falls inside the mine boundary but outside the mining authorisation boundary. Leeuwpan’s application to the DME for these two blocks was refused. The LoM reserve schedule indicates that Leeuwpan Mine plans to mine this underground block from 2011 to 2035. Based on opinions expressed by Kumba’s legal advisers, SRK has included the coal reserves falling within these two blocks. The LoM schedule excludes the 200ktpa RoM coal to be supplied by Stuart Coal (an independent mining company) up to 2012, with 100ktpa of saleable product. There is a concern that Stuart Coal might not have sufficient reserves. The opencast section is scheduled from 2005 to 2035. All the opencast equipment is owned by Kumba and operated and maintained by Archer Mining. The underground operation is scheduled from 2010 to 2035 at a rate of 480ktpa. The current strategy for the underground operation is to use a contractor that will supply his own equipment.

The overall planned stripping ratio is 1.04 : 1 amounting to 4.6Mm³ of overburden. The RoM Coal Reserves are planned to be depleted at a production rate of approximately 4.9Mtpa.

Mining is by conventional load and haul methods utilising hydraulic excavators that load material into 30t articulated dump trucks (“ADTs”). The use of ADTs results in a relatively large fleet size. Due to poor conditions during the wet months of the year resulting from the clay in the overburden, larger rigid frame trucks cannot be used. The overburden is typically some 20m to 25m in thickness including 1m to 2m of carbonaceous material. The majority of the overburden is now backfilled, as part of the mining process, into worked out areas. The stripping ratio for the next five years or so will remain above the average of the LoM reserves at some 1.04 : 1 and it is anticipated that more overburden will need to be drilled and blasted as the ratio of soft to hard material decreases as the mine advances.

The bench and slope design is based on a Code of Practice developed for Leeuwpan Mine. This indicates that an overall slope angle of up to 45° is stable in most areas of the mine, however localised failures in some areas of Kenbar have necessitated the use of lower slope angles of 35°. All ramps are designed at a maximum inclination of 12.5% and minimum width of l0m and 15m on surface and in-pit, respectively. The majority of the overburden and all the discards and non-coal carbonaceous material are backfilled. Top soil and sub-soil are stockpiled separately for on-going rehabilitation.

The coal is typically 12m to 14m thick and comprises a top coal and bottom coal with ash contents of 35% and 15%, respectively. The product size and ash content can be managed during the treatment process, though the volatile content of the product is dependent on the blend of coal delivered from the two pits. The planned coal qualities will be sustained through management of sufficient exposed Coal Reserve to support blending requirements.

Both Seams of coal are drilled together and lightly blasted, at a powder factor of some 0.lkg/t, such that the excavator can top load the trucks and excavate the two Seams separately. The mine delivers coal to the process plant six days per week and trucks the process discards from a bin adjacent to the primary crusher back to the pit for disposal. The targets for overburden stripping are seasonally adjusted due to problems with rain, however properly constructed roads for coal hauling result in minimal plant production losses.

The mine has introduced a half-life policy for the replacement of primary earthmoving equipment of 15,000hrs. Half of the equipment is now below 15,000hrs and half above. The objective of this is to achieve consistent availability of equipment, maintenance costs and capital replacements.

The mine has, prior to the finalisation of participation in the RBCT expansion, recently developed additional markets overseas for low volatility coal, and has brought forward the scheduling of low volatility reserves in the LoM Plan.

Future mining at Leeuwpan Mine will focus on continuing improvements in utilisation of the primary earthmoving equipment and optimisation of the pit layouts and haul road design. Investigations will be made into alternative transportation methods for the Weltevreden deposit, situated some 8km from the processing plant, Currently provision is included for road transportation of the RoM product although this is considered to be sub-optimal in terms of cost.

SRK considers that the applicability of the mining method and geotechnical design to be appropriate. SRK also consider that the changes in depth and stripping ratio together with increasing distance of the mining faces to the processing facilities, as the mine advances, have been accounted for in the projected operating costs as reported in Section 14. SRK considers that the LoM projections are achievable providing sufficient exposed coal enables the flexibility in blend requirements.

5.3.3

Tshikondeni Mine

Tshikondeni Mine is a mature operation that has been in production since 1983, using underground mining methods to produce coking coal for steel production. The entire production is purchased by Mittal’s steel producing works at Vanderbijlpark. The mine projects a life of some eight to nine years, thus classifying Tshikondeni as a medium life asset. The mining complex consists of four operational areas, each having separate access. These are: Nyala (two years of life left), Vhukati, Mutale and Mupani (two months of reserves left). Future mining activity will be centred on the development of the reserves of Goni (four years of reserves), Mutali and Vhukati. The Goni shaft falls inside of the mine lease area, but outside the areas covered by the approved EMP and the mining authorisation. Some 20% of the Goni resource falls outside the mine lease area. The Coal Reserves are expected to be fully depleted in 2014. The total production anticipated over this period is 6.0Mt of RoM coal. The RoM production is planned to be 0.746Mtpa to the plant, beyond 2005. Based on written advice from Kumba’s legal counsel regarding the potential of Goni shaft to convert its old order mining rights to new order mining rights, these numbers include Goni shaft.

The mining method consists of a standard bord and pillar system with secondary extraction by stooping. Pillars are nominally developed at 24m – 33m centres. Primary extraction is carried out by two conventional (drill and blast) sections, one stone section and three roadheader sections to increase pit room definition and flexibility required due to the complex geological conditions. Both operations carry out stooping and the roadheaders are the preferred system to extract pillars below 220m. Extraction is planned at 75%, but in-panel geological losses and poor ground conditions encountered during stoping, have produced historic extraction levels averaging 68%.

Access to the underground Coal Reserves is gained by means of surface adits that are driven either in Seam or in the floor to intersect the ore body at a deeper elevation. Primary development consists of seven roads driven on the dip of the Seam. Where Seams are disturbed by faults, dykes or burnt coal, roadways are generally developed through these structures.

Ventilation to the workings is supplied by a standard system of intake airways from the main and satellite shaft declines. Return air is exhausted via raise bored shafts situated in the vicinity of the intake airways. These shafts are necessary to maintain an acceptable level of environmental conditions in workings that are more than 1km from the surface adit or are deeper than 300m. SRK found that a good standard of ventilation design and practice exists on the mine.

Coal clearance is facilitated by a series of conveyor belts fed by underground Ram cars and LHDs. The individual availability of conveyors and cars is acceptable and the belts are cleaned by contractors.

Tshikondeni is one of the most challenging coal mining environments in South Africa for strata control. Management has developed various strategies to combat the poor ground conditions associated with the highly disturbed coal Seam with consequent development of mine strata control skills.

The mine standards can be described as good in extremely challenging geological conditions.

Future mining activity will be centred on the development of the Coal Reserves at Goni, Mutale and Vhukati.

5.3.4

Arnot Colliery

Arnot Colliery is an Eskom-tied colliery which has been in operation since 1972. The planned production rate is currently 5,600ktpa RoM and it is anticipated that this production rate will be maintained until 2018. It is the opinion of SRK that the planned target of 5,600ktpa can be achieved with the current equipment. However, an additional suite of underground equipment is recommended to ensure that Arnot is able to meet its supply commitments to Eskom. If any additional coal is required, the option of the Mooifontein pit is also available. Mine access is via the No. 3, No. 8 and 10 Shafts, all of which are incline shafts.

Machine deployment at No. 8 Shaft will be one continuous miner section and one road header section for the first three-quarters of the year. Three new continuous miner sections will be introduced in the last quarter of 2005 to replace the shortwall operation. The mining method to be used in the low Seam ares is not a commonly used method in South Africa.

At the No.10 Shaft, machine deployment will consist of one continuous miner section and one roadheader section in multi-road development. A low Seam section will continue to develop through low areas and areas where in-Seam stone does not allow for the current equipment. This will release higher Seam reserve areas for the current equipment. Shortwall mining operations will cease on the completion of the 400 block, a section in the shaft. The decision to stop the shortwall resulted from the cost of repairs of the equipment together with the limited reserves over the remainder of the life of the colliery. The contamination levels should be lower after the shortwall has been stopped, which could result in less RoM being washed or no RoM being washed, as was historically the case at Arnot.

5.3.5

Matla Colliery

Matla Colliery is an Eskom-tied colliery which has been in operation since 1978. Matla Colliery produces 15,000 – 15,500ktpa of coal. It extracts thermal coal from the No. 2 and No. 4 Seams. This coal is mined for Eskom from underground mines: Matla No. 1 Mine, Matla No. 2 Mine and Matla No. 3 Mine. The minimum mineable coal qualities are:

• A 23MJ/kg (dry) heat value has been used for the No. 2 Seam.
  
• A 18MJ/kg (dry) heat value has been used for the No. 4 Seam.
  

The required ratio to meet the Eskom quality requirements is:

This equates to approximately 30% No. 2 Seam and 70% No. 4 Seam.

Currently all three mines are accessed via vertical shafts. Matla No. 1 Mine employs a bord and pillar mining method while the No. 4 Seam utilises continuous miners and shuttle cars. A new shaft with a capital requirement of ZAR133m is planned for 2006. The new No. 1 Mine will be accessed via a box cut highwall entry.

The No. 2 Mine has a shortwall in the No. 2 Seam with continuous miners and shuttle cars on the gate road and the main developments. No. 2 Mine only has one shearer, which means that the face move takes about four weeks. A face break, this year, caused a production delay of three months. In the next panel there is a risk that a similar face break could reoccur.

In order to minimise the risk, a pre spilt line will be drilled into the No. 4 Seam barrier pillar. This pre spilt line will then be blasted. Production has been further constrained by the fact that four face moves were planned this year, when only two face moves are usually planned per year. The capacity of the vertical shaft will be upgraded from 50tph to 80tph.

The No. 3 Mine has a shortwall in the No. 4 Seam with continuous miners and shuttle cars on the gate road and the main developments. The No. 3 Mine has two shearers, which means that face moves are reduced from four weeks to two weeks. One of the options is to mine a 17% CV product at a height of 3.9m above the mudstone band. The current method is to mine the mudstone band at a height of 3.5m. Matla has a detailed 18-month plan, five-year plan and LoM Plan. The Eyesizwe board has approved the No. 5 Seam Project, a project to supply Eskom with additional coal. However, this project remains subject to Eskom’s approval and demand for metallurgical coal.

5.3.6

New Clydesdale Colliery

New Clydesdale Colliery is an export colliery which will mine the Nos. 1, 2, 4 and 5 Seams in the Vaalkrans North opencast operation and No. 2 Seam from the pillars in the Vaalkrans South Area. Future underground mining will take place in the Diepspruit No. 1 and No. 2 Seam, east of the river. The colliery currently produces coal for both export and domestic markets. No. 4 Seam Coal is currently being mined at Vaalkrans North by the truck and shovel method. The underlying No. 2 Seam in the reserve area has been mined out by bord and pillar mining method using continuous miners, as well as specific areas where pillar extraction has taken place. Capital spent on Vaalkrans South No. 2 Shaft to establish the access to the Diepspruit Coal Reserves totals an amount of ZAR9,6m. A pillar extraction programme has been initiated. The Vaalkrans South pillar extraction project has been done with the assistance of Coaltech 2020 research. It commenced in September 2004, when the old workings were entered safely and panels evaluated for pillar extraction compatibility.

Several months of development work has been completed in order to provide and partially establish the infrastructure for mining of the Diepspruit Coal Reserves. This involved extensive sweeping of the main travelling ways as well as pumping of water and slurry removal in the main developments.

The underground operation is scheduled from 2006 – 2013 at a rate of 1,400 – 1,900ktpa from 2006 up to 2012, with the production rate dropping to 400ktpa in 2013. It is the opinion of SRK that:

• The capital in the 2006 business plan (LoM) needs to be increased from ZAR72.6m to ZAR94.6m. This amount includes an additional ZAR12m for continuous miner rebuilds and an additional ZAR10m for the Middeldrift development.

5.3.7

North Block Complex

The North Block Complex comprises the following:

• Glisa opencast operations on portion 24 of Paardeplaats 380 JT, which produces coal for Eskom. The opencast at Glisa will be depleted by July 2006. Open cast mining is conducted by truck and shovel using the roll over method.
  
• Glisa underground operations, which comprises two sections and produces coal for the “D” grade market. Underground mining is conducted by the bord and pillar method using a Voest Alpine AM80, a Wirth Continuous miner with six shuttle cars. The underground at Glisa was depleted by March 2006 year and will be relocated to the Glisa South area. Incorporation of Glisa South into the LoM is restricted as the Coal Resources are classified as Inferred.
  
• Strathrae opencast operation and new pits, which comprise the Main plant Pit West, the Main plant Pit East, and the Grootpan – Klippan pits from the No. 2 Seam using the truck and shovel roll over strip mining method.

5.3.8

Mining Methods of Coal Projects

Table 5.3 below indicates the mining methods which will be employed at each of the coal projects.